You can purchase a Treasury bill that is 107 days from maturity for $14,870. The Treasury bill has a face value of $15,000.



Round your answers to 3 decimal places. (e.g., 32.161)



a. Calculate the Treasury bill’s quoted yield.

Quoted Yield: 
%

To calculate the quoted yield on a Treasury bill, we can use the following formula:

\[
\text{Quoted Yield} = \left( \frac{\text{Face Value} - \text{Purchase Price}}{\text{Face Value}} \right) \times \left( \frac{360}{\text{Days to Maturity}} \right) \times 100
\]

Given:
- Face Value = \$15,000
- Purchase Price = \$14,870
- Days to Maturity = 107

Now, let's compute the quoted yield. 

\[
\text{Quoted Yield} = \left( \frac{15,000 - 14,870}{15,000} \right) \times \left( \frac{360}{107} \right) \times 100
\]

I'll calculate that now.The Treasury bill's quoted yield is approximately **2.916%**.

Would you like more details or have any questions?

Here are some related questions you might find useful:
1. How does the quoted yield differ from the actual return on investment?
2. What is the impact of the number of days to maturity on the yield?
3. How do Treasury bills compare to Treasury bonds in terms of yield?
4. What role does the 360-day year play in financial calculations like this one?
5. How would the quoted yield change if the purchase price were different?

**Tip:** Treasury bills are typically considered low-risk investments because they are backed by the U.S. government, making them a popular choice for conservative investors.

You can purchase a Treasury bill that is 107 days from maturity for $14,870. The Treasury bill has a face value of $15,000. Calculate the Treasury bill’s quoted yield.

Calculate the quoted yield on a Treasury bill purchased for $14,870 with a face value of $15,000 and 107 days to maturity. Learn the key formula used in finance to determine yield, with step-by-step instructions on how to apply the 360-day year convention.

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